NEW YORK (GenomeWeb) – Biopharmaceutical firm Galmed Pharmaceuticals today announced deals with metabolomics-based assay firm One Way Liver Genomics to develop a companion diagnostic test for Galmed's therapeutic Aramchol for treating non-alcoholic steatohepatitis (NASH).
The companies will collaborate on developing a non-invasive, blood-based test during Galmed's Phase IIb ARREST study. The test, which will include metabolic biomarkers, is being developed as a potential replacement to liver biopsies for evaluating the efficacy of Aramchol. If successful, the test could increase the drug's market penetration, Galmed said.
Additionally, the test could improve the selection of NASH patients suitable for Aramchol, including patients for a potential Phase III study of the drug.
Under the terms of a licensing deal, Galmed will provide up to £437,000 ($671,000) in co-funding to develop the CDx test over the course of the ARREST study. The amount will be paid based on the achievements of certain development milestones.
Biscay, Spain-based One Way may earn royalties of up to 10 percent on annual net sales of the test upon its commercialization.
Under a separate share purchase agreement, One Way could earn £75,000 upon the successful completion of the study's interim results, expected in the first half of 2016. It also is eligible for another £100,000 upon the successful completion of the study.
Upon the two milestone payments, Galmed will receive shares of One Way based on its most recent valuation. One Way has also granted Galmed an option to purchase additional shares, up to 19.9 percent of One Way's stock, the biopharma firm said.
"It's clear that today's standard of care for the diagnosis of NASH — an invasive liver biopsy — will become obsolete over the coming years and will not serve as a suitable follow-up tool to determine the success of treatment," Galmed President and CEO Allen Baharaff said in a statement. He and One Way CEO Pablo Ortiz added that the deal, "which is the first step in the identification of biomarkers capable of predicting an individual's response to Aramchol, is critical to the development of personalized strategies that will optimize therapeutic outcomes."